What to do about the Aged Pension?, page-18

PS: Correction: I meant maintaining the Aged Pension at its current rate of indexation to 2027 & not 2017)

Please remember, the GFC is not forever and neither is our bust.
We have economic cycles and if we rely on history we'll have booms also.

Remember that in early 2008 we had little or no debt with $20 billion in the kitty
and the strategy at the time was to pay this $20 billion to taxpayers and welfare
recipients to avert recession. This is why cutting pension and welfare benefits
is not a good strategy when we are again looking at Recession in the face.

As per yesterday's Australian, a recession could cause a rapid rise in unemployment,
massive mortgage defaults and the possible failure of some of our bank mortgage
providers.

Our current level of debt is sustainable at less than 30% of GDP while the USA and
the EC are 100%+ and Japan is close to 200%. This by the way is the bulk of the First World.

Just after the last election Joe Hockey loaned the RBA $8 billion to punt on the AUD and then
loaned $1 billion to Indonesia to prop up their banking system.In January the repayment
of the Indonesian loan was deferred until the run up of the next election.

This $9 billion will no doubt be used as re-election pork barrelling by the Abbott
Government to win the next election.

It seems cynical of the Treasurer to complain about mounting debt as the reason for
reducing the Aged Pension when he is loaning $9 billion of that debt to the
Indonesian Government to prop up their banks and the RBA to speculate on the currency.


MM